Brits flash the cash in the shops, says Bloomberg News

18 February 2005

Financial news agency Bloomberg has found consumers are back flashing the cash (or the credit cards) on the high street after the worst retail sales in December in more than a decade.

The survey of 33 economists revealed that UK retail sales probably rose by 0.8 per cent this month, showing a year on year increase of 3.8 per cent.

Consumers have had several incentives to get spending, with a record 1.5 per cent price cut in January by many retailers, according to figures released by the British Retail Consortium on February 10th.

Tesco, the largest retailer in the UK, cut the price of 500 products by nine per cent on January 3rd.

Asda, owned by Wal-Mart Stores, then followed three days later, saying it would make price cuts worth £117 million in the first quarter of the year.

"We had an unbelievable drop in December and there have been more aggressive price cuts than last year,' said Ross Walker, an economist at Royal Bank of Scotland Plc in London, in an interview with Bloomberg.

Not all the economists interviewed were positive about consumer spending, however.

The increase was the median opinion, but Mr Walker himself considered there to have been some "cooling of demand" on the part of consumers.